KDW 0.78d and 0.78e have critical bug.
please use 0.78c or 0.78f
kdw set Icondesk's transparent on registry, look trans.reg.
New version WMP10 can work without install KDW in system.
Does the Start Menu's icons trouble occure again after deleting shelliconcache?
However, without it Windows Media Player 10 will not work.
It also messes up the Start Menu's icons, but no other icons that I found were affected.
Btw, you should update the first post to 078e.
As well as the KDWINST file, it says 074.